L.A. Council closer to seeking more 'responsible' banks for city business
The proposal, modeled after initiatives seen in Cleveland and Philadelphia, applies to Wells Fargo -- the city's primary bank -- and other banks, including JPMorgan Chase, that do business with the city.
Under the ordinance, banks are encouraged to provide information on their lending practices, such as their foreclosure rate, how often they modify mortgage loans, and if they maintain branches throughout Los Angeles.
But revealing the limitations of the ordinance, the law doesn't disqualify banks from doing business with the city if officials disapprove of the banks' practices and the data submitted.
A version of the ordinance was proposed two and half years ago by City Councilman Richard Alarcon, who said he was alarmed by the ethical decisions made within the banking industry. The proposal's popularity grew within the last year, fueled by the Occupy movement and a growing, anti-Wall Street sentiment seen across the country.
In a statement after the vote, Alarcon said the city "took a giant step forward" in holding banks more accountable.
A handful of executives from banks attended the Monday's City Hall hearing, joining a crowd that included religious leaders and Occupy L.A members.
"We want to be part of the city's process," said Peter Villagas, vice president, Office of Corporate Responsibility at JPMorgan Chase. "We are always looking for ways to work with the city."
UPDATE: A previous version of this story suggested banks won't be required to submit information to the city as part of approval process. In fact, some data will be required for consideration.